The following excerpt is from Paris v. Smith, 270 F. 65 (2nd Cir. 1920):
Agreement to enter into a contract relation implies that the parties will deal with each other in good faith. This is essential to the meeting of the minds. If one of the parties fails to act in good faith, and in fact deceives the other, it is an actionable fraud, and breaches the implied obligation he is under, and he must respond in damages. The aggrieved party may have the remedy to rescind the contract; but he may, at his option, affirm the contract and bring an action for damage, recovering such amount as he may prove. A complaint that, as here, sets forth false representations made to the defendants in error, upon which they relied, and with the result that they parted with their money to their damage, sufficiently sets forth an action for deceit. Any damages that necessarily and naturally flow from such a contractual relation may be proved without pleading special facts showing the damage. Colrick v. Swinburne, 105 N.Y. 503, 12 N.E. 427.
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